Silvio fury after fraud conviction

Pol threatens to bring down Italo government

ROME — Silvio Berlusconi has reacted to his conviction in a tax fraud case concerning TV rights deals with Hollywood studios by threatening to bring down Italy’s government in a rampage that could also damage his Mediaset TV empire.

The fuming 76-year-old billionaire and former prime minister said he may withdraw his support from current prime minister Mario Monti, a day after the Milan court handed him a four-year sentence on Friday. Berlusconi is appealing the verdict.

During a Milan presser Berlusconi lashed out against the judges who convicted him, calling them leftist dictators, and said he would decide in the next few days whether his center-right PDL party, the largest in parliament, should pull out of government.

The prospect that Berlusconi, in raging bull mode, may cause Monti to topple, has commentators spooked.

“The damage would be enormous,” said Stefano Folli, editor of Italo financial daily Il Sole 24 Ore on Sunday, citing “international anxiety” and a “general discrediting” of Italy among consequences.

The court found Berlusconi guilty of using offshore companies to buy TV rights to some 3,000 movies from studios, including Paramount and Fox, at inflated prices between 1995 and 1998 to evade taxes and create a slush fund.

The court also convicted Hollywood-based producer and sales agent Frank Agrama, who allegedly negotiated the bulk of these deals. Agrama, who claims he’s innocent, will not serve jail time thanks to an Italo amnesty on convictions of three years or less.

The same amnesty partly applies to Berlusconi, reducing his four-year sentence to a year. He’s unlikely to go to jail due to his age and the lengthy appeals process, which will probably outrun the statute of limitations.

The court also ordered €10 million ($12.96 million) damages to be paid by Berlusconi and his co-defendants to Italo tax authorities.

According to the court, the exec handling the fraudulent deals on Berlusconi’s behalf was the now deceased Carlo Bernasconi, the former prexy of Berlusconi’s film unit, Medusa.

Berlusconi announced he was retreating from politics just days before his guilty verdict.

On Saturday, in an abrupt about-face, he announced he was “staying in the game.”

This does not mean he will seek to run the country again — the ruling barred Berlusconi from holding public office for five years — but he will wield power to, as he put it “reform Italy’s justice system.”

He has long claimed to be a victim of political persecution by local judiciary.

This is Berlusconi’s first conviction in a series of trials that earned him the nickname the “Teflon don,” because of his ability to avoid conviction during his time in office.

While it is too early to gauge the verdict’s impact on Mediaset, which is battered by a double-digit advertising downturn and TV audience fragmentation, what’s clear is that the ties between Italy’s top commercial broadcast group and its largest stakeholder are unlikely to be beneficial anytime soon.